Citadel LLC is a global hedge fund with its headquarters in Chicago and over 1,400 employees spread out in offices throughout Asia, Europe, and North America. With assets under management in excess of $26 billion, Citadel is among the largest alternative asset managers in the world. Plus Citadel is among the 3% of hedge funds which has existed for over 20 years. Founded by investment wunderkind Ken Griffin in 1990, Citadel has trading products like interest rates swaps for institutional and retail clients, equity options, and equities.
Citadel manages the assets of university endowments, pension, sovereign wealth funds, and many of the other largest institutional investors on the planet. Its group of hedge funds is among the world’s largest and most successful. It ranks second among the largest multi-strategy hedge funds worldwide. It has a strong risk management culture, state-of-the-art technology, and excellent research fundamentals. Its investment strategies include credit, fixed income, equities, quantitative strategies, and commodities.
Citadel completed a Yuan fund raising program which enabled it to give Chinese investors the opportunity to put their money in overseas hedge funds in 2014. It was the first foreign hedge fund to do so. Prior to that Citadel had outperformed the industry average for 2009 and 2010 with gains which exceeded 20%. The rest of the industry posted 5% losses on average. Citadel Securities automated its trading which produced tighter spreads and lower costs. Plus it provided its institutional and retail clients with trade execution and liquidity. Its price improvements for non-S&P and S&P 500 shares were ranked #1 by Barron’s.
The brains behind Citadel is Harvard-educated Kenneth Griffin. Griffin started trading when he created his first hedge fund as a freshman. By the time he graduated in 1989 with his degree in economics, he had created a second fund, was getting real-time trading information from a satellite dish he installed on his dorm, and had over a million dollars under management. Soon after graduation, Glenwood Partners’ founder gave Griffin a million dollars to invest. Griffin surprised him by getting a 70% return on his investment. Griffin stated Citadel in 1990 with just over $4.5 million. By 1998 the company had over $2 billion in assets.
In 2003 at age 34, Griffin had a net worth of over $650 million. By 2014 his net worth was in excess of $5 billion. Due to Griffin’s vision, risk management techniques, and bold, innovative actions, the company weathered the 2008 financial crisis and emerged stronger than ever. Griffin also made key investments in his staff. He provided his employees with personal gifts, fitness programs, free lunches and museum tours. He also created a collaborative work culture which his employees loved. In 2015 the firm was voted one of the 10 best financial services companies in which to work.
Kenneth Griffin is also a generous philanthropist. He has given away over $500 million to various charities, schools, museums, and children’s hospitals in Chicago and nationwide. He’s also the world’s most active art collector.